What to do if You Think You Are a Victim of Dealer Fraud

Aug 29, 2023

Buying a late model used car can be a savvy way to save money on an excellent vehicle, but what if the vehicle that was represented to you as clean or even certified turns out to be a lemon? What if it was previously damaged and the dealer didn’t disclose that? Or what if the dealer added fees to the agreed upon price, falsely advertised a sale, or played fast and loose with the financing? 

If any of those things happened to you, you may have a legitimate case for dealer fraud. Before “lawyering up,” you should give the dealer a chance to make it right, but be prepared for disappointment. 

In that case, the incident should be reported to whatever agency handles complaints against car dealers in your state. If you want to pursue the matter further and get financial satisfaction, you will need to hire an attorney. 

Proving Dealer Fraud Is Tricky

Dealer fraud cases can be hard to prove. Laws vary from state to state about what a dealer has to voluntarily disclose. In some states, for instance, unless asked about it specifically by the potential buyer, a dealer does not have to volunteer the fact that a car sustained previous damage in a wreck. 

And even if a buyer asks and gets a dishonest answer, it’s the buyer’s word against the dealer. For that reason, it’s not a bad idea to go car shopping with someone else who can act as a witness.

Regardless, it can be very tricky to prove that a dealer intentionally did something fraudulent.

Protect Yourself From Dealer Fraud 

Fortunately, there are a few things you can do during the buying process to help guard against dealer fraud and avoid purchasing a lemon. 

  • Any specific car could turn out to be a lemon, but some makes and models are problematic in general. By visiting online forums for the type of car you’re considering, you may be able to learn something helpful. You can also just Google “reliability” of the car brand you’re considering.
  • JD Power releases reliability studies that can help disclose potential problems with a certain make or model. It’s no guarantee that a specific car won’t have problems, but you get a general sense of the probable reliability of the brand.
  • If you suspect you’re being lied to or if you see the dealer falsely record any of your financial information or details, walk away immediately.
  • Check the Buyers Guide sticker on the window. The Federal Trade Commission requires a dealer to display this, and it lets the buyer know what, if any, warranty comes with the vehicle.
  • Always run a vehicle history report on any used car you are thinking of purchasing. Unless a vehicle has very recently been in a flood or wrecked and repaired, this information will appear in the vehicle’s history.
  • Any used vehicle should be checked out by a mechanic.
  • Another option is to take the car to a professional vehicle appraiser. Expert appraisers are good at sniffing out things like paint that’s covering a repair job or welding marks under the hood. Some appraisers specialize in classic cars, which is helpful if you’re in that market.

What if I Need to Sue for Dealer Fraud?

If this advice reaches you too late and you believe you are a victim of dealer fraud, hire a lawyer and then get Auto Mediator on your team. We have over 25 years in the appraisal business, and we offer Pepperdine-trained mediators and expert witnesses in all types of cases involving deceptive dealer practices and fraud. Our years of experience make us an excellent asset to have on your side in a courtroom.